Can Labour end its war with business?

This morning Labour put Geoffrey Robinson on to run up the white flag with the business leaders who have backed the Conservatives on National Insurance. That looked like wise and sensible politics, and he did it professionally. He told us the= business leaders were great guys who had a point of view, and that in one sense all taxes are taxes on jobs.

So why then did Lord Mandelson chose this same moment to attack Mr Diamond of Barclays? Unsubsidised banks are businesses too, as the Today interviewer spotted. Is Labour losing its touch? Is it rattled by the success of the first new tax cut of the campaign?

If Lord Mandelson is serious about rebuilding links with business, and if he wishes to stop the flow of new investment, company headquarters and new jobs to overseas countries with lower tax rates, he should announce an end date for the 50p Income Tax rate.

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24 Comments

  1. waramess
    Posted April 3, 2010 at 10:18 am | Permalink

    GR is right for a change: all taxes are taxes on jobs. The difference with this tax is that it applys to companies who are not making a profit as well as to those that are.

    GR would now do well to spread the news to his colleagues; if they want jobs then they should stop increasing taxes.

    Mandy on the other hand has a far too high opinion of his stature; he is a public servant paid for out of the toils of private enterprise and for him to start criticising the pay policy of a privately owned company who have received no state support beggars belief.

    Mandy would do well to consider his role and who is paying him to perform it before letting his motor mouth on the loose again

  2. Brian
    Posted April 3, 2010 at 10:30 am | Permalink

    Wasn't it Robinson who was helpful to Mandelson's mortgage arrangements?

    • Mark
      Posted April 3, 2010 at 11:24 am | Permalink

      Bailed him out again??

  3. Acorn
    Posted April 3, 2010 at 11:14 am | Permalink

    More important to consider "nation's war with itself" today. Yesterday in Brick Lane London there was a riot outside an American Apparel Rummage Sale*. This company is one of America's largest clothes manufacturers; it has been accused of having a political agenda on immigration. It holds these sales in big cities. (*see youtube)

    As far as I am aware this London sale was the first one to have a riot attached. The NYT has an article comment on the less than civil language being used by the police to a fifteen year old girl.

    Welcome to multicultural Britain.

    • Stuart Fairney
      Posted April 3, 2010 at 12:42 pm | Permalink

      What did you notice about most of the rioters if anything?

    • brian kelly
      Posted April 3, 2010 at 12:47 pm | Permalink

      Yes, exactly

  4. Mark
    Posted April 3, 2010 at 11:22 am | Permalink

    George Osborne specifically attacked Bob Diamond's £63m bonus during the "Chancellor's Debate", and I think he was right to do so, since making money in the rigged banking markets is like taking candy from a baby. As far as I understand it, Barclays avoided having to sell shares to HMG, but otherwise has been more than happy to take advantage of the myriad state subsidy schemes on offer, such as the Credit Guanrantee Scheme, the Special Liquidity Scheme, the Asset Purchase Facility, and the rigging of the yield curve with perpetual access to cheap short duration finance from the Bank of England. Barclays may have been in less trouble than some of its peers, but unsubsidised it is not.

    • Sally C.
      Posted April 4, 2010 at 5:00 pm | Permalink

      Absolutely right, and on top of that, Barclays is trading with an implicit government guarantee. Having bailed out Northern Rock, RBS, and HBOS, this government has set the precedent – no major UK bank will be allowed to fail, and Barclays is right at the top of that list.

  5. David Price
    Posted April 3, 2010 at 12:12 pm | Permalink

    I expect nothing less of Mandelson and Labour to (behave like this -ed). Do they really think that people won't notice their true natures being repeatedly revealed?

    I don't know about others but it will take more than a cut in the 50% tax rate for me to put my money into UK business rather than where it is now. Like the vast majority of UK citizens I do not earn enough to qualify for the 50% rate. Instead I get rubbish returns on my savings, my pension has been savaged by the government and I am paying too much and too many taxes.

    My discretionary funds are not with UK companies, I will not contribute to the bonus pots of greedy execs who can't even lend money with proper security. In that sense they and Labour are truly made for each other.

    Frankly, a lot will have to change for me to switch back to investments that favour UK enterprises rather than their competitors. At the very least the UK government needs to become far more loyal and respectful to its own citizens than it has been in the last 20 years or so, the same might be said of UK enterprise.

  6. alan jutson
    Posted April 3, 2010 at 12:22 pm | Permalink

    Me thinks Lord Mandelson is only interested in building up his own (interests-ed) (not done a bad job so far) and thus any route is fair game that may help in this regard.

    Positions of power help in this regard, just look at Blair's income since he left office. Although why one would want to pay thousands to listen to him simply beggers belief.

    Think the Conservatives may just have wrestled back the initiative for a while these last few days (about time too).

  7. Antisthenes
    Posted April 3, 2010 at 12:23 pm | Permalink

    Labour's policies consistently harm the economic and social well being of the UK and to them that is fine. They are either very stupid or they want to destroy the UK so that a new socialist order can be resurrected from the ashes.

    You can choose, but either way it seems to me that putting Labour in charge of government is equivalent to putting arsonists in charge of the fire station.

  8. John
    Posted April 3, 2010 at 12:32 pm | Permalink

    John what do you think of changing the VAT range to 25% down to zero?

    The top end could go on items say over £20,000 etc, while at the same time some items could have less VAT on them than today.

    I also think there is a good chance of Darling reducing the NI charges before the election, as Brown will do anything to stay in power, and George has got them into a right spin at present.

  9. Stuart Fairney
    Posted April 3, 2010 at 12:43 pm | Permalink

    Mandy accused Diamond of being socially useless? Talk about accuse your enemy of your own worst fault!

  10. Irene
    Posted April 3, 2010 at 2:11 pm | Permalink

    What about the bosses of the banks that were bailed out by the taxpayer – how much do they earn?

    Mandleson is obviously trying to deflect attention away from the NI balls up by labour and is obviously not thinking before he opens that large mouth of his. He is now looking more and more rediculous.

    What on earth has this twice (resign-ed)ed man done for labour since his return, except of course keep Brown in.

    Robinson – pass.

  11. Lindsay McDougall
    Posted April 3, 2010 at 2:44 pm | Permalink

    I don't want Labour to end its war with business because I want a Conservative government. Is that high risk? I don't think so because business (banking excepted) is in better odour with the public than this government.

    Talking of banking, why did George Osborne attack Barclays bank? Barclays is a bank that did NOT, repeat NOT, hold out its begging bowl to this government. What Barclays Bank does is none of his business, and none of this government's business either.

  12. Mr Ecks
    Posted April 3, 2010 at 3:48 pm | Permalink

    As the "Burning our Money" blog points out, open rebellion against New Lab has broken out in Stoke. Mandy is just trying to establish some street cred with the plebs.

    Please tell me who Cammy-baby is trying to establish cred with by pedalling his "Big Society" tripe–(suggestion left out-ed)

    I wish I was 16 again so I could tell him where to stick it.

  13. Johnny Norfolk
    Posted April 3, 2010 at 4:37 pm | Permalink

    This is the first time Labour has been on the back foot. I hope it has spoiled the Easter week end for them just like they have spoiled ours for the last 13 years.

  14. ps
    Posted April 3, 2010 at 5:15 pm | Permalink

    Labour are being forced to choose between business(who will help us work our way out of the disastrous situation Labour have created) or the unions who fund Labour and are their core vote(and helped reduce UK’s competitiveness and level of wealth through their stupid workplace changes).

    Is it time to pledge to reduce fuel duty? Motorists and business are getting really p***ed off with the ever rising price of going about their lives. Again this will put Labour in a tricky spot. (actually it might also make a positive difference to the tax situation as I suspect people are now being priced off the road)?

  15. Donna W
    Posted April 3, 2010 at 6:30 pm | Permalink

    Mandy is getting desperate. He can see Labour going down to defeat and the Brown/Balls/Whelan strategy of getting enough Unite members into Parliament, to ensure that it won't be a Blairite who becomes Labour's next leader, making headway.

    I think there will be a backtrack – or a promise of a backtrack – on Labour's proposed NI increase before long. As soon as Mandelson can figure out a way to do it and retain SOME credibility.

    Today's 'Gene Hunt' poster was fantastic. A huge own goal for Labour. In one extremely stupid move, they have given Cameron some 'street cred.'

  16. no one
    Posted April 3, 2010 at 7:23 pm | Permalink

    I look forward to the conservatives restricting work visas from overseas, then the big banks will be forced to use European staff for their back office jobs, creating several tens of thousand of jobs for Brits and Europeans very quickly. This will also push the wages to respectable living wages and expose the dodgy practises of the banks, frankly anyone can drop the costs by using (cheaper labour from overseas-ed) – its not skilled management.

    This will no doubt also expose the reality behind how badly behind their restructurings many of the big banks are, and force them to start accounting a little more honestly, then of course the big boys will not be able to justify their bonuses quite as easily.

    It remains to be seen how friendly the leaders of big business are to any political party prepared to rain on their cheap labour parade like this.

  17. Posted April 3, 2010 at 11:48 pm | Permalink

    This war with business started with blaming the banks for the current crisis. In the Labour view their wild excesses created the crisis, and so must be now tightly regulated to prevent this happening again. Once you go down this route, it is only a small step to saying that all business is only beneficial to the general welfare if tightly controlled.
    To go back on this might be to admit that the banks were not entirely to blame for the crisis and the mounting debt. Allow this chink, and the debate in the general election campaign will be as to how far the tripartite structure of central banks, regulatory authorities and government policy was to blame.
    The further stage is then to lay bare how poor the state of the government finances were during the boom years. That is, creating an ever-increasing structural deficit during the boom years. By my calculations about half the forecast National debt of £1400 billion in 2014 will be down to economic mismanagement since 2001.

    Please expect near daily bashing of business during the next few weeks, in the hope that people will be distracted enough to look the other way. If the Labour party – the self-proclaimed defender of public services – were to admit that they have wrecked the public finances for a generation, then the party were implode. If they have any let-up on the business-bashing, then Gordon Brown will end up with a bigger defeat than Micheal Foot in 1983.

  18. Martin
    Posted April 4, 2010 at 8:43 am | Permalink

    I reckon that Lord Mandelson's remarks were the type that a politician who is expecting to be in opposition for a while would make. They were perhaps designed to appeal to the hardcore vote rather than be sensible in a government party.

  19. Chuck Unsworth
    Posted April 4, 2010 at 12:34 pm | Permalink

    Astounding repeated attacks by Mandelson. What can he possibly hope to gain from this? Does he seriously believe he can cow Diamond and his colleagues?

    Does he seriously believe that his behaviour will endear him to anyone at all in the business community? And let’s not forget how many businesses there are – from the self-employed right tha way up to the global corporation. Is his behaviour likely to make political allies of any of these? How many will now support and make contributions to the Labour Party – and why?

    Complete political lunacy, but worse, how much is this damaging the country?

  20. Posted May 7, 2010 at 10:00 am | Permalink

    What on earth has this twice (resign-ed)ed man done for labour since his return, except of course keep Brown in.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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